Pakistan stocks plunge over 600 points on selling pressure

Javed MirzaWeb Editor

28th Jun, 2021. 08:01 pm
PSX

KARACHI: Massive selling pressure was witnessed at the Pakistan Stock Exchange on Monday where the market remained in the red zone throughout the day.

An analyst at Pearl Securities said the bloodbath was seen due to the likely mutual funds redemption, amid year-end phenomenon. “Furthermore, a mix of negative flows also dominates the market sentiments, as Pakistan remains in [the] FATF’s grey list and geo-political uncertainty keeps evolving.”

The Pakistan Stock Exchange KSE-100 shares index shed 1.26 per cent, or 601.01 points, to close at 47,002.35 points. The KSE-30 shares index shed 1.26 per cent, or 240.64 points, to close at 18,873.04 points.

As many as 416 scrips were active, of which 78 advanced, 315 declined and 23 remained unchanged.

The ready market volumes stood at 655.12 million shares, compared with the turnover of 761.42 million shares in the last trading session.

An analyst at Arif Habib Limited said the market dipped 701 points during the session and closed the session down 612 points.

“Financial year-end closing for the institutional investors (banks and mutual funds) prompted profit-booking, especially in the aftermath of [the] MSCI downgrade from [the] Emerging Markets to [the] Frontier Markets, which can possibly result in selling from foreign corporates.”

Selling pressure was witnessed across-the-board with emphasis on cement, banks and E&P sectors.
Ahsan Mehanti at Arif Habib Corp said that the stocks fell across-the-board on institutional selling, amid likely MSCI downgrade to the Frontier Markets by September 7 this year and the FATF decision of keeping Pakistan on the grey list.

“[The] support remained on [the] higher global crude oil prices, government’s decision to reduce taxes in the auto sector and the rupee stability. However, foreign selling, reports of $632 million current account deficit in May 2021, and [the] concerns over [the] IMF condition for raising power tariff and taxes played a catalytic role in the bearish close.”

Going forward, analysts recommend investors to adopt ‘sell on strength’, as the market could continue its downward momentum by the end of this fiscal year.

The companies, which reflected the highest gains included Hinopak Motor, up Rs42.95 to close at Rs615.62/share; and Pakistan Tobacco, up Rs24.4 to close at Rs1,401/share.

The companies that reflected the most losses included Bata Pakistan, down Rs70.60 to close at Rs1,660.43/share; and Sanofi Aventis, down Rs46.94 to end at Rs92306/share.

The highest volumes were witnessed in WorldCall Telecom with a turnover of 98.86 million shares. The scrip shed 14 paisas to close at Rs3.81/share; followed by Byco Petroleum with a turnover of 52.86 million shares.

It shed 75 paisas to close at Rs11.4/share. Jahangir Siddiqui (rights) was the third with a turnover of 50.35 million shares. It shed 82 paisas to finish at Rs2.19.

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